can someone help me as soon as possibleHomework Answers
Solution is Option (a) : Ignored
Under percentage of sales method, the bad debts adjustment to be
charged to allowance for doubtful accounts is calculated as a
percentage of current year sales and hence while passing the
adjustment entry, the opening balance in allowance for doubtful
debts is not to be considered. It is ignored.
However balance should be considered in case of percentage of
receivables method. In this method, the bad debts (adjustment) to
be charged to allowance for doubtful debts is calculated on the
ending balance of accounts receivables.
Note: In both methods, the adjustment entry is:-
Bad debts Account Dr
To Allowance for doubtful debts
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Can someone help me fix the
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